Norsk Hydro takes 10% equity in ONGC's KG block

Norway's Hydro has taken a 10% participating farm-in stake in ONGC's KG-DWN-98/2 deepwater block in the Krishna-Godavari basin off eastern India.

Sept. 18, 2007

Shirish Nadkarni
OGJ Correspondent

MUMBAI, Sept. 18 -- Norway's Norsk Hydro AS has taken a 10% participating farm-in stake in Oil & Natural Gas Corp.'s KG-DWN-98/2 deepwater block in the Krishna-Godavari basin off eastern India.

Hydro may increase the stake by another 10% after commerciality is shown.

The agreement is the follow-up of a development and cooperation agreement the companies signed in July in which an investment cap of $26 million was established during the appraisal phase.

Hydro also is working with ONGC for thin-oil-ream exploitation in Vasai East, near Mumbai—one area identified in the earlier agreement.

In addition, the Norwegian firm has expressed interest in assuming a participating interest in additional New Exploration Licensing Policy (NELP) blocks as well. ONGC has 32 offshore blocks under NELP, of which 12 are in ultradeep water, 14 are in deep water, and 6 in shallow water. ONGC has 100% participating interest in 12 blocks, while varying levels of equity in the remaining 14 blocks have been farmed out to others.